BUSINESS PLAN

PROPOSAL

On

CASSAVA CHIPS

PRODUCING ENTERPRISE

Submitted by:

Nilo Barmiro

Jovert Viñas

BSBA ECONOMICS 4th Year

Submitted to:

Prof. Czarina S. Saikol

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ACKNOWLEDGMENT

The researchers would like to express their sincere and heartfelt gratitude to the

following people who became a part on the success of this business plan.

First and foremost, to the loving parents of the researchers, Mr. and Mrs.Viñas,

Mr. and Mrs. Barmiro. Particularly to Mr. and Mrs. Chan for giving us their support

emotionally, socially and of course financially.

To the adviser, Mrs. Czarinah Saikol, for challenging and guiding them with their

business plan.

To the following offices, the Department of Trade and Industry for allowing the

researchers to get the information needed to conduct such business plan proposal.

To the management of Sarangani Cassava Chips Producing Enterprise, for

letting the researchers conduct an interview and for giving them the much needed

information on the different aspect of their enterprise.

To the authors other business plan proposals for being the researchers‟ bases on

creating this feasibility study.

To our classmates and friends, for the support and understanding they have

given to the researchers.

And most especially to our loving Almighty God, for giving the researchers the

knowledge and wisdom they needed in conducting the research and also for the

guidance and the blessings that was brought to them.

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 Table of Contents

Page
Title Page ………………………………………………………………………...........1

Acknowledgement………………………………………………………………………2

Table of Contents………………………………………………………………….…...6

CHAPTER I- EXECUTIVE SUMMARY OF THE PROJECT

1.1 Name of the Firm……………………………………………………….…7

1.2 Location…………………………………………………………………….8

1.3 Major Objectives of the Business Proposal…………………………….8

1.4 Description of the Business ……………………………………..……….9

1.4.1 Marketing Plan…………………………………………….…..10

1.4.2 Production Plan……………………………………….………10

1.4.3 Organizational and Manpower Plan…………………………11

1.4.4 Financial Plan………………………………………….……….12

1.4.5 Critical Risk Analysis……………………………………….....12

1.4.6 Social significance…………………………………………….12

CHAPTER II- THE BUSINESS…………………………………………………………

 The Product ……………………………………………………………….13

 Brand Name …………………………………………………...13

 Product Fashion ……………………………………………....13

 Product Quality………………………………………………...13
 Product Packaging and Labeling …………………………....14

3
CHAPTER III-ORGANIZATIONAL PLAN ……………………………………………..

 Manpower Plan……………………………………………………………....15

 Organizational Chart ……………………………………….…....15

 Temporary Organizational Chart……………………….. …..…..16

 Ideal Organizational Chart…………………………………..…...16

 Personnel Qualification ………………………………………….18

 Personnel Duties and Responsibilities …………………….......19
 Human Resource Control Policies …………………………......19

 Strategic Management(Pre-operating Activities)………………21

 Gantt Chart of Activities…………………………………………..23

CHAPTER IV- PRODUCTION PLAN …………………………………………………….

 Production Forecast For Five Years …………………………………....25

 Location Strategy ………………………………………………....26

 Location Map or Vicinity Map……………………………….……27

 Process and Design Strategy………………………………........27

 Process Flow ………………………………………………….…..27

 Production or Services Procedures ………………………….…28

 Plant and Shop Layout ………………………………………………..….29

 .Inputs and Management………………………………………...29

 Raw Materials………………………………………………….......29
 Facilities and Equipments………………………………...….…..29.
 Utilities Waste Disposal……………………………………….…..30

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  Technology Requirement………………………………….……31

 Manufacturing Cost / Production Cost…………………………31

CHAPTER V- MARKETING PLAN…………………………………………….

 Market Research Analysis………………………………….…..31

 Target Market………………………………………………….…31.
 Demographic Profile …………………………………….……...32

 Psychographic and Behavioral Profile……………………..…32

 Market Size and Trends ………………………………….…….33
 Estimate Market Share…………………………………..….…..34

 Pricing Strategy…………………………………….…....35

 Pricing Structure………………………………………....35

 3.6 Introduction or Launch Stage……………….…....35

 3.3 Growth and Maturity Stage……………………....35

 . Sales and Distribution Strategy………………………………..35

 Order and Processing…………………………………………....36

 Order Quantity…………………………………………………….36

 Order Lead Time…………………………………………….…....37

 Volume of Safety Stocks ………………………………….…...37

 Warehousing and Storage……………………………………….37

 Distribution Channel…………………………………………..…41

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  Growth and Maturity Stage………………………………………..43

 Marketing Control Policies………………………………………...44

 Similarities and Differences with Other Competitors………….44

 Similarites…………………………………………………………..44.

 Differences………………………………………………………….44

CHAPTER VII- CRITICAL RISK ANALYSIS ……………………………………………

 Potential Problems………………………………………………………….…45

 Obstacle and Risk………………………………………………....45

 External Risks……………………………………………………...45

 Competition………………………………………………………...45

 Peace and Order…………………………………………………...45

 Rapid Change in Technology………………………………….....46

 Internal Risks……………………………………………………………….47

 Objectives ………………………………………………………….……….47

 Areas and Consideration …………………………………………………47

 Alternative Courses of Actions ……………………………………….…..47

 Contigency Plans …………………………………………………….…...48

 Exit Strategies ……………………………………………………….…….49

F. CONCLUSIONS AND RECOMMENDATIONS……………………………………..51

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I. EXECUTIVE SUMMARY

a. Brief summary of the plan

This chapter presents the brief outline of the proposed project of cassava

chips producing enterprise type of business. The chapter also contains the name

of the firm, its location, brief description of the project, and the project summary.

i. Name of the Firm

A firm‟s name is defined as a brand, term, sign, symbol, or design, or a

combination of these, intended to identify the goods and services of one seller or

group of sellers and to differentiate then from those of the competitors (Ilaro, M.,

2001).

JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. is the name

chosen by the two aspiring entrepreneurs whom they based on their first name

Jovert C. Viñas and Nilo A. Barmiro. The name was chosen it is because they

want to strengthen their relationship this time as a businesspersons.

ii. Location

Jose Catolico Boulevard, General Santos City which is in front of KCC

Mall is the strategic location that the partners have chosen. The location is

situated in the city where other establishment, schools, and potential consumers

7
 are also to be found. The products and services offered by the proposed entity

will become more accessible to the market.

b. Major Objectives of the Business Proposal

The main aim of the business is to produce good quality cassava chips for

secondary processors of High Quality Cassava Flour based in the urban centers.

The processing of fresh cassava into chips will increase the income of cassava

farmers in the area, reduce post-harvest losses and create employment for the

people in the area.

Also it aims to tap existing producers and encourage potential investors in

the region to venture into cassava (tapioca) chips production to supply the

needed demand of the Philippine International Trader Corporation (PITC). Thus,

it will catalyze investment in the region, facilitate financing and create job

opportunity and livelihood in the region.

c. Description of the Business

Cassava and sweet potato are two roots crops that are cultivated in many

parts of the Philippines. In some areas of the country, it is eaten as substitute for

rice. Cassava, locally known as kamoteng kahoy or balinghoy (scientific name:

Manihot esculenta) ranks as second in terms of volume of production among all

the root crops in the country. Cassava is an edible tropical plant that yields

tuberous roots from which cassava flour, tapioca (laundry starch), or even

alcoholic beverages can be derived. Cassava is commercially traded as raw

materials for various food and non-food industrial products. About eighty percent

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(80%) of cassava supply is used as feed formulation while twenty percent (20%)

is used as food consumption.

Most of the snack items popular in the market do not have much

nutritional value; hence it is termed as junk foods. In fact, most contains food

preservatives to enhance their flavor and lengthen its shelf life. Root crops like

cassava can be made into nutritional and affordable snacks, cassava (Tapioca)

chips is one such nutritional and inexpensive snacks. Cassava root is very rich in

starch and contains significant amounts of dietary fiber, calcium, iron,

manganese, phosphorous, potassium, vitamin B6 and vitamin C. Dietary fiber

has been associated in lowering the risk of cardiovascular disease, colon cancer,

and helping control diabetes. A study also shows that cassava significantly

decreases total cholesterol levels, low density lipoprotein (LDL) cholesterol

(considered as “bad” cholesterol), and may help lower triglyceride levels due to

its high total dietary fiber content. Consumers eat snacks, but with the growing

number of diseases and ailment today, consumers need to be very selective with

the food that they eat. With that, cassava (tapioca) is a very good substitute to

the regular snacks that are found in the grocery store. It just does not give a very

tasty treat but a nutritive and affordable snacks that all can afford to buy.

Given the potential of the project, entrepreneurs will have a sure market

and great opportunity for their products.

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d. Marketing Plan

The business will market its product to its target customers which is

composed of students, tourists, and all other people that may be a source of profit

on the side of the business.

e. Production Plan

Our production system shall strive to attain service excellence in addition to

manufacturing safe, quality products. This shall be undertaken through the

engagement of modern production techniques using up-to-date assembly

technology. This will also result in low production costs being attained by the

business. We also intend to ensure that the suppliers we engage are committed and

reliable so as not to let down the final consumer in terms of the quality of the product

and time of delivery.

In order to improve productivity in our plants we intend to reduce waste and

duplication in our production of cassava chips by streamlining administrative

functions and promoting and instilling a business culture that focuses on the

teamwork rather than individual productivity. By the undertaking the above we will

optimize our productivity given our available resources.

f. Organizational and Manpower Plan

Personnel management is productive exploitation of manpower resources.

This is also termed as „Manpower Management‟. Manpower Management is

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choosing the proper type of people as and when required. It also takes into account

the upgrading in existing people. Manpower Management starts with manpower

planning. Every manager in an organization is a personnel man, dealing with people.

Planning is nothing but using the available assets for the effective

implementation of the production plans. After the preparing the plans, people are

grouped together to achieve organizational objectives. Planning is concerned with

coordinating, motivating and controlling of the various activities within the

organization. Time required for acquiring the material, capital and machinery should

be taken into account. Manager has to reasonably predict future events and plan out

the production. The basic purpose of the management is to increase the production,

so that the profit margin can be increased. Manager has to guess the future

business and to take timely and correct decisions in respect of company objectives,

policies and cost performances. The plans need to be supported by all the members

of the organization. Planning is making a decision in advance what is to be done. It

is the willpower of course of action to achieve the desired results. It is a kind of

future picture where events are sketched. It can be defined as a mental process

requiring the use of intellectual faculty, imagination, foresight and sound judgment. It

involves problem solving and decision making. Management has to prepare for short

term strategy and measure the achievements, while the long term plans are

prepared to develop the better and new products, services, expansion to keep the

interest of the owners.

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g. Financial Plan

The business will assure that it will maximize the use of the cassava crops in

order to lessen the cost and also to minimize the used of the scarce resources. Also

the business will assure that the capital that they have invested in the business will

be gain back after 3 years of its operation in the market.

h. Critical Risk Analysis

The business critical risk analysis is that it may encourage a healthy

competition in the market sector, promotes peace and order in the community, and

the introduction of the high-technology equipments that may faster the production of

the products.

i. Social Significance

The social significance of the business is that it will help the economy of the

Philippines to boost and also it will create more employment that may lesser the

large unemployed person here in the country.

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 II. THE BUSINESS

a. The Product

i. Brand Name

The brand name of the product is simply Cassava Chips with a tag line of

“Irresistibly Delicious”.

ii. Product Fashion

The product is unique especially here in the Philippines because it can easily

suites to the taste of every possible consumer. Also it can be a substitute for rice and it

is rich in nutritional benefits such as Vitamin A, Vitamin B1, Thiamin, Vitamin B2,

Riboflavin, Vitamin B3, Niacin, Vitamin B5, Pantothenic Acid, Vitamin B6, Pyridoxine,

Vitamin B9, Folate, Folic Acid, Vitamin C (Large Amount), Vitamin E, Vitamin K, Protein

and Choline.

iii. Product Quality

The product quality of cassava chips is 100% safe and is suitable for exporting to

the other countries. JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. ensures

that the cassava chips being produced and distributed in different parts of the world

have undergone to quality control inspections.

iv. Product Packaging and Labeling

JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. ensures that the

packaging of the cassava chips is duly sealed in plastics or in sacks and transported for

sale in the market. More decent and portable packaging could be explored.

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 Cassava chips should be stored in sacks in an airy store. Damp and hot

environment should be avoided in order to prevent moisture in the product that may

affect the quality of the cassava chips.

In order to be creative and to attract the customers from buying the product we

created our own logo for the product;

III. ORGANIZATIONAL PLAN

a. Manpower Plan

Manpower Management is choosing the proper type of people as and

when required. It also takes into account the upgrading in existing people.

Manpower Management starts with manpower planning. Every manager in an

organization is a personnel man, dealing with people.

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 i. Organizational Chart

An organizational chart -is a diagram that represents and defines the

structure of an organization in terms of rank. The organizational chart generally

plots the relationships between staff, showing directors, managers and general

workers. An organizational chart is a graphic representation that only shows

formal relationships, lines of authority and responsibility. What an organizational

chart does not reveal is social relationships or the type of managerial style an

organization has adopted. An organizational chart is also referred to as an org

chart. In addition to businesses, government agencies and school districts also

utilize the organizational chart concept. When looking at large conglomerates,

the organizational chart can become confusing and highly complicated.

Therefore, a main organizational chart is often broken down into smaller, more

functional charts. The organizational chart is usually one of three types:

hierarchical, matrix or flat. Most business plans contain an organizational chart to

describe the make-up of an organization.

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1. Temporary Organizational Chart

Managers/Owners

Worker 1 Worker 2 Worker 3 Worker 4 Worker 5

The workforce of the temporary organizational chart for the business will

be six (6). It will be made up of the owner/manager and 5 skilled workers.

2. Ideal Organizational Chart

Managers/Owners

Supervisor

Worker 1 Worker 2 Worker 3 Worker 4 Worker 5

The workforce of the ideal organizational chart for the business will be

seven (7). It will be made up of the owner/manager, a supervisor and 5 skilled

workers.

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 i. Personnel Qualification

The personnel to be hired in the company may depend on the type of the job that

he may apply to.

 Bookkeeper

- Must be 20-25 years of age male or female.

- Must be a graduate of BS in Accountancy.

- Must be a Certified Public Accountant or has taken a CPA Board

Examination.

 Cassava Chips Cook

- Must be 20-25 years of age male or female.

- Must be a graduate of any four year course.

 Service Crew

- Must be 20-25 years of age.

- Must be a graduate of any four year course.

- Must be polite and courteous to customers.

 Cashier/Information Clerk

- Must be 25 years of age, preferably a female.

- Must be a graduate of four year course.

- Preferably a Bachelor of Science major in Business Administration.

- Must be honest to its work and accurate in giving change to the

customers.

 Technician

- Must be 25-30 years old, preferably a male.

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 - Must be a graduate of BS Electronic Engineering.

- Must have passed Board Examination for Electronic Engineers.

 Security Guard

- Must be 30-35 years old, preferably a male.

- Must be polite and courteous to the customers.

- Must be a graduate of any four year course.

 Janitor

- Must be 20 years and above.

- Preferably male.

- No educational attainment is required.

ii. Personnel Duties and Responsibilities

The personnel duties and responsibilities are very important in an

organization in order to maintain unity and to avoid misunderstanding among

employees. Here are the list of their duties and responsibilities respectively:

a. The duties and responsibilities of a bookkeeper are that he is responsible for

keeping financial records for a company or a business. A bookkeeper must be

able to balance the books, making sure that all income and money spent is

accounted for. He must be meticulous and honest, paying close attention to

details.

b. The duties and responsibilities of a cassava chips cook is that he is

responsible for cooking the cassava crops into chips. He must assure that all

18
 the cassava are cook in a clean way and free from harmful substances. He

must also secure the quality control of the products.

c. The duties and responsibilities of a service crew is that he is the one who will

cater the orders of the customers. He must be polite and courteous all the

time.

d. The duties and responsibilities of a Cashier/Information Clerk is that to keep a

record of how much money they had when they opened the store, how much

money is earned when they closed the store, and the amount of change in a

register drawer for the purpose of finding out when they are required to

restock the change.

e. The duties and responsibilities of a Technician is that he should be the one to

look up into the equipments. He must assure that the facilities and

equipments are working properly in order to avoid accidents.

f. The duties and responsibilities of a Security Guard is to assure the safety of

the customers and the building as well.

g. The duties and responsibilities of a Janitor is to maintain the cleanliness of

the shop and orderliness of the products.

iii. Human Resource Control Policies

The policies imposed to employees in order to maintain peacefulness

within the organization and to assure that the organization will be successful are

as follows:

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a. Courtesy and Human Relations

The employees must observe courtesy especially in working hours. They

should respect those officials that have higher rank than them. Also, they should

mingle with other employees in the organization in order to promote unity in the

working place.

b. Punctuality and Attendance

The employees should be on time during working days. All employees

shall work 8 hours a week.

c. Initiative and Resourcefulness

The employees shall have initiative to tell the other officials when one of

the equipments is not properly working and also they should tell those employees

whom does not working properly in the plant.

They also should be resourceful in making the part of the product which is

not used by making them fertilizers or as a feeds for animal consumption in a

way that it will not bring harm to the society as well as to the environment.

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D. Strategic Management (Pre-operating Activities)

1. Pre-Operating Activities

These are the projects to be considered before the formal operation of the

business. This part discusses the different pre-operating activities of the

business:

a. Project Feasibility study

This is the period where the potential owners will have enough time to

know if the study is feasible and will become revenue-generating.

b. Preparation of Business Plan

The preparation of the business plan starts with the identification of the

following: the kind of services and products offered; availability of the materials

needed; sources of funds; personnel to be involved in the operation of the

business; suitable location for the business.

c. Sourcing of Business License and Permit

The business license and permit will be obtained to make the business

operation legal.

d. Construction of building and facilities

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 The construction of building is done through the help of experts like

engineers and architects to secure the safety and good foundation of the

building. This is to prevent unexpected circumstances that may occur in the

operation of the business.

e. Acquisition of Equipments, furniture and fixtures

The equipments, furniture and fixtures will be acquired by negotiating from

established suppliers of the market. This is to secure the quality of the

machineries to mitigate expenses to be incurred from repairs and maintenance.

f. Hiring of employees

The employment of the personnel needed for the business operation

should be taken carefully into consideration. The company should look into

every aspect that could affect the labor force. This will be done through posting of

job vacancies, and then acceptance and selection of component workers follow.

g. Start of Business Operation

The JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. will be

opened formally to the public after the pre-operating activities have been

completed.

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GANTT CHART OF ACTIVITIES

a. Time Table

The time table plots the different activities under the pre-operating stage. It gives a

clearer picture on how the pre-operating activities should be done. The activities are

arranged in accordance to the duration of the accomplishment. Below is the Gantt chart

of the activities of the JN Enterprise Inc.

Table 12. GANTT CHART of the Pre-operating activities of JN Enterprise.

Pre-Operating Months of Completion

Activities 1 2 3 4 5 6 7 8
a. Project study

b. Preparation of
Business Plan
c. Sourcing of
Business
License and
Permit
d. Construction
of Building and
facilities
e. Acquisition of
Equipments,
Furniture and
Fixtures
f. Hiring of
Employees
g. Start of
Business
Operation

The Gantt chart illustrates the pre-operating activities of JN CASSAVA CHIPS

PRODUCING ENTERPRISE INC. The pre-operating activities are necessary in guiding

the proponents of the study. This supports the proponents in putting up the business.

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IV. PRODUCTION PLAN

a. Monthly Production Forecast

Moving average is used in the production forecast of the JN Enterprise of its

Cassava Chips Products. It is also called rolling average, rolling mean or running

average, is a type of filter used to analyze a set of data points by creating a series

of averages of different subsets of the full data set.

PRODUCTION FORECAST FOR FIVE YEARS

PRODUCTION FORECASTS YEAR 1

EXPECTED SALES MOVING TOTAL MA3 FORECAST

JANUARY 14
FEBRUARY 40 86 28.67 %
MARCH 32 118 39.33 %
APRIL 46 122 40.67 %
MAY 44 146 48.67 %
JUNE 56 160 53.33 %
JULY 60 158 52.67%
AUGUST 42 137 45.67%
SEPTEMBER 35 115 38.38%
OCTOBER 38 131 43.67%
NOVEMBER 58 158 52.67%
DECEMBER 62

PRODUCTION FORECASTS YEAR 2

EXPECTED SALES MOVING TOTAL MA3 FORECAST

JANUARY 10
FEBRUARY 16 46 15.33%
MARCH 20 57 19%
APRIL 21 77 25.67%

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MAY 36 87 29%
JUNE 30 85 28.33%
JULY 19 76 25.33%
AUGUST 27 88 29.38%
SEPTEMBER 42 117 39%
OCTOBER 48 140 46.67%
NOVEMBER 50 128 42.67%
DECEMBER 30

PRODUCTION FORECASTS FOR YEAR 3

EXPECTED SALES MOVING TOTAL MA3 FORECAST

JANUARY 20
FEBRUARY 20 50 16.67%
MARCH 19 60 20%
APRIL 30 87 29%
MAY 47 127 42.33%
JUNE 50 152 50.67%
JULY 55 166 55.33%
AUGUST 61 141 47%
SEPTEMBER 25 114 38%
OCTOBER 28 82 27.33%
NOVEMBER 29 137 45.67%
DECEMBER 80

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 A. Location Strategy

Location strategy is the process of choosing where to locate a unit

producing goods or services. This must take account of a range of variables to

achieve the minimum cost that optimizes the overall strategy of the particular

organization. There are three basic strategies. In a product-based strategy,

independent facilities are used to produce each product in a company's range.

i. Weighted Alternative and Criteria

LOCATIONS
CRITERIA PUBLIC PIONEER SCHOOLS NEAR
MARKET (example MALLS
(particularl MSU,RMMC (particularly
y Gensan NDDU,HTC,GFI) KCC MALL
Market) OF
GENSAN)
1. Customer Traffic 2 1 1 1
2. Market Accessibility 1 1 1 1
3. Competitors in the 4 4 4 4
market place
4. Target Customers 3 3 3 3
5.

LEGENDS: 1 – Accessible 2 – Not Accessible 3 – Many 4 – Less

26
 ii. Location Map or Vicinity Map

STALLS STALLS JN ENTERPRISE INC.

J. Catolico Boulevard

STALLS STALLS KCC MALL

OF GENSAN

The location map of the business is located in front of the KCC Mall of

Gensan, where many of its target customers are present.

A. Process and Design Strategy

A. Process Flow

A business process flow is a way of visualizing and documenting the steps

in a business process. Business process flows are flow charts that document

inputs or requests for information, products or any other deliverable; the

procedural steps to satisfy that request; and the output, or deliverable that is

generated by the input.

27
B. Production or Services Procedures

Here are the production procedures of the business:

1. Buying of Cassava Crops in the market.

2. Washing of Cassava Crops.

3. Peeling of Cassava Crops.

4. Cutting of Cassava Crops into Chips

5. Preparation of Cassava Chips and its ingredients for frying.

6. Frying of Cassava Chips.

7. Packaging of Cassava Chips. (Cellophane container and plastic cans).

8. Inspection of Cassava Chips for quality control.

9. Placing the product into the shop racks for display.

10. Selling it to the customers.

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 i. Plant and Shop layout

Here is the blueprint of the shop layout of the JN Enterprise Inc.

6m

KITCHEN SHELVES
Kit
S
COMPUTER H
DESK
S E
H L
V 5m
E
L CASHIER’S TABLE E
V S
E ENTRANCE
S
SHELVES

B. Inputs and Management

i. Raw Materials

The main raw material used is fresh cassava. The fresh cassava must be

fully matured between 10-12 months. This is processed under clean and hygienic

conditions into high quality cassava chips.

ii. Facilities and Equipments

The facilities and equipments used in the production of Cassava Chips are

just simple equipments such as weighing scale and sealer machine.

29
iii. Utilities and Waste Disposal

It is essential for every business to have a proper waste disposal. This

secures the cleanliness as well as the health awareness that may affect the

customers and the personnel of the business.

The waste of the JN CASSAVA CHIPS PRODUCING ENTERPRISE INC

will be properly disposed of by following the local government‟s way of disposing.

The JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. waste will be

gathered and segregated according to biodegradability and non-biodegradability.

Afterwards, these will be delivered to the proper waste disposal site of the

city. As for the production plant, the equipments shall be replaced every 5 years.

Clean water will be also readily available which is needed in cleaning fresh

harvested cassava crops. Also, a drainage system will be build up by the

company that will serve as a storage for the waste out of the peeled cassava

crops. The company assures the people within its community that they will be

safe from harmful chemicals that might affect their health.

On the other hand, utilities are important in the business since it supports

the operation of the business. This includes services, such as water, sewer, gas,

electricity, and telephones that are generally required to operate a building.

30
 iv. Technology Requirement

When the business is in its maturity stage the company will acquire high-

technology equipments to meet the production requirement of the business.

Examples of high-technology equipments are those machines that have the

capacity to produce high quality cassava chips in less than an hour.

v. Manufacturing Cost / Production Cost

V. Marketing Plan

a. Market Research Analysis

This chapter presents the marketing aspect of the study of the proposed

enterprise to ascertain potential demand and consumer preferences. This contains the

target market, market size and trends, demand, supply, and the demand and supply

analysis.

i. Target Market

The target markets of the proposed cassava chips producing enterprise

are all those people who live in General Santos City. Especially, those

individuals who are health conscious whom wants to eat nutritious foods such as

cassava chips.

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 ii. Demographic Profile

The demographic profile includes the target markets of the

proposed cassava chips business are those in the reasonably

productive ages of General Santos City‟s population. Included in

the spotted target market are those in the working age group (15 to

64 years old) with 329,856 or 62.5 percent of the total household

population of 529,542. Within the said age group are 165,666,

High school students, 18,801, Post secondary, 44,633, College

undergraduates, 42,804, Academic degree holders and 763 Post

baccalaureate.

iii. Psychographic and Behavioral Profile

Demand, sometimes called effective demand, is the amount

purchasers are willing to buy at a specified price. The need of many

to satisfy their hunger is the impelling cause in the steady increase

of the proposed business venture‟s demand.

According to the gathered data, the consumers identified by

the competition are families, students, employees and friends.

They were considered as clients mainly because they are people

that the establishments intended to offer their products and

services. Shown in Table below are the estimated demand of the

proposed venture‟s competitors, other cassava chips producing

enterprise for the years 2009 and 2010.

32
 Demands

2009 2010

Couch Potato Inc. 100 150

iv. Market Size and Trends

The market size and trends refer to the total population of this industry‟s

enthusiasts that may be obtained with this proposed venture. This will determine

the actual number of target market or consumers in every business‟ market. It

also estimates the possible customers that will primarily serve as basis for

possible sales and provide definite market segmentation for the venture itself.

Based on the data gathered by the researchers from the Census of

Population, the market size of the industry is 329,856 or 62.5 percent of the total

population. These are economically viable citizens and are capable of

compensating for the products and services that the business enterprise would

be offering. GenSan, being one of the fastest growing cities of the Philippines,

with an annual population growth rate of 3.53 percent which indicates that there

is also an increasing effect in the demand trend of the proposed business

venture.

v. Estimated Market Share

The market share of the business venture realistically is in the range of

11% which has the total of 36,000 out of 329,856 individuals of the working age

33
 group in General Santos City. The following graph shows the estimated market

share of JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. with respect to

some of its competitors.

Estimated
Market Shares
JN CASSSAVA CHIPS PRODUCING ENTERPRISE INC. Couch Potato Inc. Others

11%

22%

67%

Figure 2. Estimated Market Share

A. Pricing Strategy

The price is one of the components of the marketing aspect which contributes

to a large extent in the attainment of the firm‟s sales and profit goals. The pricing

strategy will help the company achieve its objectives. JN CASSAVA CHIPS

PRODUCING ENTERPRISE INC. will use the marketing penetration strategy. This

type of pricing strategy sets its price at the lowest possible price range to penetrate

34
the market as rapidly as possible, attracting many customers and winning a large

market share.

i. Pricing Structure

Pricing of the products are one of the important part that must be included

in the marketing plan. It is because it is one of the factors that will determine if

the product will be suitable for the market for sales.

1. Introduction or Launch Stage

During the introduction or launch stage, the price of the cassava

chips will be at a low cost.

2. Growth and Maturity Stage

During the growth or maturity stage, the pricing strategy that the

proposed business will implement on its products will be doubled.

b. Sales and Distribution Strategy

The movement of goods and services from a source through distribution

channel, right up to the final customer, consumer, or user, and the movement

of payment in the opposite direction, right up to the original producer or supplier.

35
 i. Order and Processing

Order processing primarily refers to the steps undertaken from the time

the customer makes an order up to the time the ordered goods are delivered to

them. In order for a customer to acquire his/her order, the business will use the

“pay as you order” system, wherein the customers will directly address his/her

order to the staff assigned in the counter. The customer will then pay for the

goods ordered, after that he/she could wait in one of the tables for the goods to

be delivered to him/her. For the JN CASSAVA CHIPS PRODUCING

ENTERPRISE INC., customers will go directly to the staff assigned in the

information desk of the store. Customers will then choose what type of the

cassava chips flavour they want to buy and they will immediately pay the

required payment before they can take the products with them.

The customers will be treated with much respect. Each service crew will

serve the customers with a smile. The process will be done in routine and will be

improved for the wellness of the customers.

1. Order Quantity

In JN CASSAVA CHIPS PRODUCING ENTERPRISE INC.,

a customer order quantity depends on the customer‟s choice and

his/ her financial capability as long as he/she can afford the goods

and services offered by the business and the goods are readily

available to be served.

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 2. Order Lead Time

The customers in the JN CASSAVA CHIPS PRODUCING

ENTERPRISE INC. will only be waiting for a maximum of 2 minutes

before he/she could fully receive the order.

3. Volume of Safety Stocks

The volume of safety stocks is 200 per day in order to meet

the demand of the target customers

ii. Warehousing and Storage

Warehousing is an important component of physical distribution. Due to

some reason, some products are not distributed immediately to the customers

after they have come out from the production line. Nevertheless, these products

should be properly kept in good condition until they are finally distributed to the

customers. The business enterprise will use the FIFO method in which the first

products entered in the inventory will also be the first to be used and distributed

to the customers.

The storage of the finished products is stored at the small compartment

located at the back of the shop. It is free from any moist and it is well a ventilated

area in order to keep the product in its fresh and crisp form.

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 iii. Distribution Channel

Distribution channel plays an important role in the marketing of the goods

and services of the proposed business. This distribution channel is a set of

interdependent organizations and individuals that facilitate the movement and the

transfer of the ownership of commodities from the producer to the ultimate

consumer (Medina, 2007). The distribution channel which will be used by the

business enterprise would be a direct distribution channel. This is an

arrangement wherein the company will directly sell its product to the customers.

This is the most appropriate distribution channel to use since the company offers

consumer goods intended for final consumption.

SELLER CUSTOMERS

c. Promotion and Sales Strategy

Promoting a product consist of four alternative channels. These are

personal selling, advertising, publicity, and sales promotion (Medina, 2007).

These strategies would help build and improve consumer demand. It involves

encouraging the customers to patronize the goods and services offered by the

proposed venture.

i. Advertising Strategy

This is done to effectively inform and persuade the target market.

Advertisements are any paid form of non-personal presentation and promotion of

ideas, goods, or services, by an identified sponsor. The business would be

38
advertised through the help of the advertising media in the locality such as

leaflets, posters and tarpaulins.

1. Launch or Introduction Stage

a. Advertising Strategy Mix

Here is some of the Advertising Strategy Mix that the Business will

do:

 Publicity

Publicity is a form of promotion, not paid for, and whose

sponsor is not identified. Publicity is used to make its target market

be aware of the business‟ products, services, and activities. It is

also used to maintain a certain level of positive, public visibility; to

protect a particular image; and to overcome negative images.

The business would plant commercially significant news

about its product and services in a published medium or even on

radio. Also, the business would rely on the testimonies of the

customers who have experienced and was satisfied with the

products and services offered by the venture.

 Personal Selling

This refers to the direct face-to-face communication between

the business enterprise and its prospective customers. This is an

attempt to communicate with the objective of making sales. The

cahiers, waiters, front-desk, and all other workers who could directly
39
communicate to the customers will also act as salesperson of the

business. They would convince the prospective buyers to buy and the

present buyers to buy some more of the business‟ goods and

services.

b. Sample Advertising Mix

Here is the sample script that the proposed business that will

be placed on tarpaulins, pamphlets and in tv commercials.

Sick of potato chips? No? Of course, it is kind of difficult to get

bored with munching on those salty tasty fried potato chips. They are

so delicious that sometimes you can‟t even stop yourself once you

start eating those potato chips – they are everyone‟s favorite snack. It

is actually very nice to consume potato chips while you are watching a

movie. I would highly recommend everything to enjoy the experience.

But come on, don‟t you want to eat something different for a change?

And we are talking about a snack which tastes a lot like potato chip

but slightly meatier and crunchier due to the extra starch. If you have

eaten Cassava Chips, its texture is very close. The reason why I like

having a bigger crunch is that it feels more filling to me, so you won‟t

over consume, like what we usually would if we were eating potato

chip. Oh by the way, Cassava chips are made from the Cassava

root.

40
 It is 0g of Trans Fat and 0g of Cholesterol. Note that the zero

is probably a run-down and is different from having absolutely no

Trans Fat and having no Cholesterol. Finally, this is gluten and GM

free.

It comes with six flavors that you will surely enjoy! Cassava

Chips (Regular Flavor) Cassava Chips Bacon Flavor) Cassava Chips

(Cheese Flavor) Cassava Chips (Barbeque Flavor) Cassava Chips

(Sweet & Sour Flavor) Cassava Chips (Spicy Flavor). So what are you

waiting for? Grab this once in a lifetime chance it is 100% irresistibly

delicious!

Anyway, you should try Cassava Chips for a change. You

might even like it.

2. Growth and Maturity Stage

ii. Promotion Strategy

Promotion is one of the four elements of marketing mix (product, price,

promotion, and place). It is the communication link between sellers and buyers

for the purpose of influencing, informing, or persuading a potential buyer's

purchasing decision.

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1. Introductory and Launch Stage

Launching is an essential part of promoting a particular business

venture. It is the time when the establishment will be open to meet its

perspective customers. Every business establishment should prepare well

for its grand opening. To attract the potential buyers, the proponents

proposed to give different promotions to them. For the launch stage of JN

CASSAVA CHIPS PRODUCING ENTERPRISE INC., the business will be

giving free samples of Cassava Chips per order on the launching date

Customers are entitled for a 10% discount on the launching day.

2. Growth and Maturity Stage

The Growth and Maturity Stage are characterized by rapid growth

in sales and profits. Profits arise due to an increase in output (economies

of scale) and possibly better prices. At this stage, it is cheaper for

businesses to invest in increasing their market share as well as enjoying

the overall growth of the market. Accordingly, significant promotional

resources are traditionally invested in products that are firmly in the

Growth Stage.

When the business is in its growth and maturity stage the owners

are more focused on product modification and improvement and to

improve production efficiency and quality.

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 iii. Pricing Strategy

The price is one of the components of the marketing aspect which

contributes to a large extent in the attainment of the firm‟s sales and profit goals.

The pricing strategy will help the company achieve its objectives. JN CASSAVA

CHIPS PRODUCING ENTERPRISE INC. will use the marketing penetration

strategy. This type of pricing strategy sets its price at the lowest possible price

range to penetrate the market as rapidly as possible, attracting many customers

and winning a large market share. Below is the pricing structure of the company.

1. Price Structure

PRODUCTS PRICES
Cellophane Packs Plastic Tubes
small large small large

Cassava Chips (Regular Flavour)

Cassava Chips Bacon Flavour)
Cassava Chips (Cheese Flavour)
Cassava Chips (Barbeque Flavour)
Cassava Chips (Sweet & Sour Flavour)
Cassava Chips (Spicy Flavour)

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d. Marketing Control Policies

Marketing control is the process of measuring and evaluating the results of

marketing strategies and plans and taking corrective actions to ensure that

marketing objectives are attained.

i. Policies Imposed to Customers

The policies imposed to customers is that when the product that has been

purchased by the customers has a defect then it shall be replaced by a new

products. Also if they have complaints in our service or products offered they can

contact us or text us in our contact numbers which are placed in the front of the

store.

ii. Similarities and Differences with Other Competitors.

Similarities

The similarities of the business from the other competitors is that the

product that is sold in the market which is the cassava chips.

Differences

The difference is that the way that we price our products and the way we

treat our valued customers as they were our boss. And also, we assured our

customers that our products undergo a series of test by the BFAD to assure that

it is free from any bacteria‟s and to assure that it is halal food.

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VII. CRITICAL RISK ANALYSIS

This chapter presents the external and internal risks, the contingency plans and

the exit strategies of the business enterprise.

a. Potential Problems

b. Obstacle and Risk

The following are the external and internal risk that the business will face

during in its existence in the market.

External Risks

Risk is an unwanted situation that an entity may experience during its

operation. There are two types of risk, the external and internal risk. These risks

are not avoidable in businesses especially to new enterprises. Some of the

possible risks to businesses are:

 Competition
Every business always has threats for new entrant. This intensity of

competition affects the business beginners in the industry. The venture

can find difficulties to penetrate the market and attract customers. It also

takes time for the business to make it much better than the competitors.

 Peace and Order

The location of the business is one of its key success factors. The

peace and order of the locality would greatly contribute to the increase in

demand and to attract customers. This is considered as risk because if

45
 there is no peace and order, investors and customers‟ demand would

decrease due to fear.

 Rapid Change in Technology

Technological advancements can bring better facilities which will

attract customers. But the rapid change can cause risk to businesses

since it can render present equipments used to be outdated or obsolete.

Internal Risks

 Capitalization
Large amount of capital is required in the operation of a business. It

is needed to put up unique and high quality of facilities which could attract

customers. Insufficient funds to finance the business will also be

considered as risk.

 Mismatch of employees‟ skills

Hiring an employee through personal judgment can be inconsistent.

This can result to mismatch of the employee‟s skills to the job. This factor

is considered a risk as the employees will have insufficient knowledge

towards the work which could reduce the productivity.

 Management
The expertise and experience of the entrepreneur are needed to

have a competent management. The management should have enough

knowledge to operate the business profitably. This factor is considered a

46
 risk if the management has no experience and expertise in the nature of

the business.

 Inefficient and Ineffective use of resources

The productivity and profitability of the enterprise is affected by the

efficient and effective use of resources. Being not resourceful can result to

greater expenses and lower income. This factor is a risk as the continuity

of the operation of the business entity depends upon the productivity of

the business venture.

c. Objectives

The objective of the proposed business is to eliminate the unwanted risks

that may arise in the business that may later affect the growth of the business.

d. Areas and Consideration

The areas to be considered in this analysis are the following: the

competitors, product development, and the way the product is introduced into the

market.

e. Alternative Courses of Actions

Here are the alternative courses of actions that the business will do in

order to prevent the problems that may arise in the business.

Contingency Plans
Contingency plan is a plan designed to deal with a particular

problem, emergency, or state of affairs if it should occur. The Couch

47
 Potato enterprise formulated steps to counter effects of possible risks that

the venture might experience.

 Availment of an Insurance Policy

Insurance befits society by allowing individuals to share the risks

faced by many people. Businesses also insure property, including

technology used in production against damage and theft. Because it

makes business operations safer, insurance encourages businesses to

make an economic transaction which benefits the economies of countries.

 Creation a Contingency Fund

Inefficient and ineffective management of capital and resources can

drive a business to the brink of bankruptcy. Having a contingency fund can

help the business in times of financial emergencies.

 Opening communication with proper Authorities

Having an open communication with the proper authorities such as

the Police and Fire Department can help prevent unwanted accidents.

Exit Strategies
Exit Strategies are the methodologies by which a business owner

can exit his or her business. The JN CASSAVA CHIPS PRODUCING

ENTERPRISE INC. formulated strategies in case of the dissolution of the

business.

 Transitioning the business to family members or management.

 Sell the business to a third party.

48
 Cancel any permits or licenses issued by the state or county.

 Notify the creditors ahead of time and pay the final bills on time.

 Payments of debts outstanding.

 Notify the customers in a timely fashion.

 Save the necessary business records and keep it carefully organized

in case it will be used in the future.

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CONCLUSIONS AND RECOMMENDATIONS

Conclusions

The marketing of cassava dried cassava chips is a fairly new practice for

farmers and also wholesalers. Cassava are important sources of in the tropical

areas, dried chips are mainly used for home consumption, but the market

orientation of farmers suggests that they would be willing to produce more if an

increase in the agricultural production of cassava and land area were possible

and more attractive prices were paid. Already cassava production has increased

due to soil fertility problems and costly inputs for other agricultural crops. Future

market possibilities for chips might increase the production potential of cassava.

Through their production increases the business willl started to export to the

other country and expected demand will for their nutritious and good to our

health. As the contain vitamins of the cassava having an important ingredient to

reduce diseases like the cancer, also to control the diabetes and etc.

This enterprise are already introducing quality standard such as minimum

70% starch, and composition free of pests, extraneous materila and aflatoxin..All

this could lead to a more commercial attitude of farmers and perhaps also to a

year-round availability of cassava chips. The market could also help to change

some storage practices in able to offer smaller chips that dry faster, store better

and keep for a longer time

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Recommendations

Having drawn these conclusions, it is now possible to make a number of

useful recommendations. It is not necessary to develop more methods but to

elaborate relevant loss-assessment methods to incorporate other valid indicators

to consider qualitative and economic aspects of the chip, such as texture, colour,

nutritive quality, organoleptic criteria or economic value. But, it should also be

noted that quality issues are less relevant in situations of limited financial and

nutritional resources.

Usage of pheromone traps and relating infestation pressure to a possible

damage of chips is another option to measure weight losses; however, these

relationships are influenced by intra- and interspecific competition of insect

species, threat of predator and micro-organism damage and climatic conditions.

The socio-economic environment of the farmer and farmers' active

participation should be emphasised. The incorporation of indicators on the socio-

economic and socio-cultural environment of post-harvest systems is urgently

needed, as is gender-specific analysis. The understanding of the separate roles

and responsibilities of men and women is necessary because both might

evaluate the same constraints differently. Furthermore, the already existing and

future marketing possibilities of cassava and cassava chips should be considered

in future studies, because the commercial value of chips decides in the end

whether farmers adopt certain protective storage procedures.

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CASSAVA PRODUCTION
Rationale

Cassava (Manihot esculenta Crantz), locally known as “kamoteng kahoy”, is a basic

staple food among Filipinos. It has a potential to reduce hunger because it is a cheap
substitute to rice. Cassava roots can be processed into various products and can
replace various associated raw materials like molasses and maize because cassava
can be locally outsourced and it is much cheaper than the two.

In the region, one of the industries that use cassava as its raw material is feeds
manufacturer present in the area of Polomolok, South Cotabato, the San Miguel Foods,
Inc (SMFI). About 80% of cassava production, excluding the human consumption, goes
to feed formulation by feed millers for animal and aqua feeds. Further, new investors
also wanted to locate their proposed manufacturing firm to produce cassava starch in
the region. With the presence of institutional buyer of cassava in the region, huge
supply is needed to fill the growing demand of the crop.

Aside from cassava as raw materials for feed formulation, cassava is now also used as
a substitute in alcoholic beverages and even bio-ethanol for fuel formulation. Such an
instance by the Eastern Petroleum is now formulating bio-fuel that will contribute to
lessen the fossil fuel dependence of the country. As a start of their program, they are
now planting cassava and piloting test with the acceptability of the product. The
proposed ethanol plant will have an initial of 200, 000 liters per day and will be sited
in Sarangani Province. With the proposed plan of Eastern Petroleum, it can generate
more employment and investment in the area.

As of 2008 the production of cassava in the region and country-wide reaches at 31,857
metric tons and 1,941,575 metric tons respectively (FAO-RAP Regional Data Exchange
System on Food and Agricultural Statistics in Asia and in the Pacific). This is too low as
compared with the needed supply requirements of the starch industry and other industry
of which cassava is used as raw material. With the increasing demand of the crop and
the increasing economic uses of cassava, thus the production of such must also
increase.

With the opportunities present in the area of region 12, it is practical to

increase and expand the current production of cassava plantation to meet
the increasing demand of the crop. With these, this may able to increase
more the investment in the area and the job opportunity in the community.

Objective

52
The project aims to increase the production of cassava in the region. This
will able to cope up the increasing demand of the crop locally and
internationally and to encourage more farmers to engage in crop production.
Thus, this will increase investment in the region and may help to uplift the
livelihood of the farmers in the region.

Project Description

Cassava is a perennial shrub which sometimes reaches the sizes of a small tree.
Cassava can be used as raw materials of various products such as animal feeds, flour
and ethanol and bio-ethanol. In a one (1) hectare cassava plantation based with the one
cropping cycle can yield a total of 40 tons of fresh harvest tuber of which it can generate
total sales of Php 100, 000.00.

Cassava, with its various uses and potential substitution to many raw materials requires
huge production to meet the growing demand of the crop. San Miguel Foods Inc. (SMFI)
for instance, targets a total of 7,500 hectares of cassava plantation in Southern
Mindanao. Aside from SMFI, there are also feed mills in the area of Polomolok that also
operate that needs cassava as its raw materials to process into finish products. With
the many institutional buyers of cassava in the region and for it to sustain the operations,
it needs to expand the production of cassava in the region.

Cassava can be best planted with sandy loam, silt loam or clay loam soil. It can be
planted region-wide, specifically in General Santos City, South Cotabato, Sultan
Kudarat, and Sarangani. The production includes activities such as clearing, trashing,
plowing, harrowing, planting, application of fertilizer and weed cultivation. A hectare land
can be planted with varieties like Golden Yellow, Lakan 1, KU-50 and a planting
distance of .50 meters apart. Fresh tuber can be harvested after 8-12 months after
planting with a total yield of 40 tons.

The project will need a total project cost of Php 35,898.75 excluding the
land cost. The project is expected to yield a gross profit and net income of
Php 67,475.25 and Php 64,101.25 respectively. The gross profit rate and
the net profit rate are 67% and 64% respectively. The return on investment
is 179%. The cost will be recovered approximately in 6 months and 22 days.
Thus, this undertaking is worthwhile to invest with.
Current Market Trends and Opportunities

Cassava is one of the alternative ingredients for animal feed, but in the Philippines is
used primarily for flour, cassava chips for snacks and also used for biofuel. Cassava
production in thePhilippines increased 7% during the first quarter of 2010. Data

53
gathered from the Bureau of Agricultural Statistics (BAS) showed that cassava
production reached 434,320 tons from January- March 2010.

As its target market, cassava will be sold to San Miguel Foods, Inc. (SMFI) for its feed
mills present in the area. Aside from the SMFI, there are also other feed mills present in
the region that uses cassava as raw materials for further processing. Department of
Agriculture (DA-12) also initiated a program to lure more farmers to venture into
cassava production in the region. The agency are currently offering local cassava
producers the opportunity of availing cassava chippers and cassava granulator
equipment as they embark into commercial production of cassava.

Thru the aide of Department of Trade and Industry (DTI-Reg.12) under its Supply
Management thru Large Enterprise (SMILE) Program, they have identified enterprises
and projects of which are locally available and need only to be linked with the small
entrepreneurs and farmers so that they can supply the needed raw materials. As a
result, this may able to decrease the outsourcing of such materials to other region
and able to increase the investment in the area and may help the farmers to uplift their
lives.

FINANCIAL REQUIREMENT

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 Cassava Production

Total Project Cost

Particulars Amount

Working Capital (1 Year)

Farm Inputs

Planting materials (184 Bundles @ Php 20.00/Bundle) 3,680.00

Fertilizers (8 Bags @Php 1,090.00/Bag) 8,720.00

Direct Labor

Trash Clearing (2 laborer @ Php225.00 @ 1 day) 1,125.00

First Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Second Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Third Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Harrowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Planting (2 laborer @ Php225.00 @ 1 day) 1,125.00

Fertilization (2 laborer @ Php225.00 @ 1 day) 1,125.00

Cultivation and Weed Control (2 laborer @ Php225.00 @ 2 days) 2,250.00

Caretaker (10% from the Gross Sales) 10,000.00

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 Sub-total 32,525.00

Operating Expenses 3,373.75

Total Project Cost 35,898.75

* Note: TPC excludes the land cost.

UNDERLYING ASSUMPTIONS:

 No. of planting materials in one (1) hectare is 20,000 with a planting distance of .50X.50 meter.
 10% allowance for planting materials is alloted for mortality rate.

 Average yield per hill is 2 kilos.

 Average yield in one (1) hectare is 40,000 kilos.
 Selling price of fresh tuber is Php 2.50 per kilo.

PROJECTED SALES AND INCOME (1 CROPPING CYCLE = 1 YEAR)

Cassava Production

Projected Sales and Income

Particulars Amount

No. of hills per hectare 20,000

Average yield per hill(kg.) 2

Total yield per hectare(kg.) 40,000

Selling price per kilo 2.50

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Total Sales 100,000.00

Less: Production Cost

Farm Inputs

Planting materials (184 Bundles @ Php 20.00/Bundle) 3,680.00

Fertilizers (8 Bags @Php 1,090.00/Bag) 8,720.00

Direct Labor

Trash Clearing (2 laborer @ Php225.00 @ 1 day) 1,125.00

First Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Second Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Third Plowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Harrowing (2 laborer @ Php225.00 @ 1 day) 1,125.00

Planting (2 laborer @ Php225.00 @ 1 day) 1,125.00

Fertilization (2 laborer @ Php225.00 @ 1 day) 1,125.00

Cultivation and Weed Control (2 laborer @ Php225.00 @ 2 days) 2,250.00

Caretaker (10% from the Gross Sales) 10,000.00

Sub-total 32,525.00

Gross Profit 67,475.00

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Less: Operating Expenses (5% from the Gross Profit) 3,373.75

Net Income 64,101.25

Return on Investment (Ave. Net Income/ TPC) 179%

Payback Period (TPC/ Ave. Net Income + Dep'n. + Amort'n.) 6 Months and 22 Days

Gross Profit Ratio (Gross Profit/ Total Sales) 67%

Net Margin Ratio (Net Income/ Total Sales) 64%

*EUL - Estimated Useful Life

*note: Cultivation and weed control is done twice (2) per cycle.

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